Why Android smartbooks will eventually be free

Posted on Wednesday, June 3, 2009 by Erlik

Android smartbooks: eventually free ?We have seen a lot of action at Computex around the Snapdragon based android eeepc and all the shenanigans around it. I think however that this is an operation by netbook manufacturers to make Microsoft realize what we already know: that they should give Windows 7 starter away for free. Given the number of manufacturers preparing Android and Snapdragon Based devices Asus can't afford to miss the boat. I also think that the new Android smartbooks will not only be cheap, but that eventually they will be free and I'll explain why below.

Even if the first snapdragon powered Android smartbooks will be sold directly to consumers, I bet this won't be the way that most of the machines will be acquired by consumers. I am pretty sure that eventually the large majority of the smartbooks will be sold as 3G browsing devices and they will be heavily subsidized by mobile network operators. That is also why unlike netbooks they will stay cheap, be ARM based and probably run Android or Google ChromeOS.

Why? Let me explain.

Mobile operators have invested large amounts of money in 3G licenses and 3G networks, but until the arrival of the iPhone these networks were severely underutilized: there are not enough private customers. This meant that it was not possible for the networks to reduce their prices and to pay for the networks roll-out. Come the iPhone and now it is almost as if there is not enough mobile bandwidth, an almost ideal situation for the network operators. The iPhone however has lot of issues too: it is too expensive and the screen is too cramped for long surfing session. This means that the iPhone market is still too limited to fulfill the network operator's objective: everyone with a 3G plan.

Then enters the netbookwith it's fairly large screen and it's comfortable keyboard. This is a form factor that almost everyone is familiar with and that could be the perfect interface to a 3G networks except for a few things: the battery life is too short, there are security risks linked to the usage of Windows, they require a 3G modem add-on and finally they are too expensive to be given away for free with a contract. This did not stop AT&T from trying the model and selling subsidized netbooks, but the consumer still has to pay $200 for the machine, this is too much for the average user. (Update: Virgin Media will soon offer free netbooks with some plans)

The solution: smartbooks

The Android smartbooks based on Qualcomm ARM based snapdragon processors and the Android OS are the network operator's dream come true: the perfect 3G access device: the machine has a comfortable netbook form factor combined with a virus free operating system and day long battery life to ensure that the consumer actually uses those 3G bytes. Most important, these machines are cheaper than the current crop of netbooks: some underpowered mips based netbooks are already available for as low as $150. This means that it will eventually be possible for networks to give smartbooks away with 3G contracts.

Of course these don't run Windows, but is that a major problem for network operators? No, they have been selling smartphonesbased on Android for some time. Actually not running Windows is an advantage for the network operators: they are very afraid of viruses running on their networks and Windows has a spotty security record.

Is The lack of Windows on smartbooks a problem for the consumer? Maybe! Part of the success of netbooks is due to the fact that since they ran Windows some consumers have purchased them as replacement for a full size laptop. The smartbooks would probably fail to fill in that role, so it is very important that they are perceived as companion devices, enlarged PDAs or improved smartphones but NOT as a computer. As long as the consumers won't expect the devices to perform like laptops they will do fine. That is probably why Qualcomm is very insistent on the smartbook name: it's not a netbook, it's not at smartphone, it is a smartphone in a netbook form factor.

Could Microsoft derail the smartbooks plan?

I don't think so! The problem is that Microsoft does not have leverage on mobile network operators like it has leverage on computer manufacturers. The operators on the other hand have huge leverage on the device manufacturers: They are in reality their customers since they purchase the machines that will be sold or given away away to the final consumer. They can decide what they want to buy or not, and if they decide that they do not want to pay for Windows, they won't. Since no manufacturer would refuse an order of half a million devices from AT&T or Verizon the manufacturers will do what they are told.

To conclude I would say that in my opinion the smartbooks will be very successful, initially as ultra portable devices sold to enthusiast, but more importantly as a way for network operators to open their 3G networks to many more consumers than the iPhone or the netbooks could.

image cc by nDevilTV

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4 Responses to "Why Android smartbooks will eventually be free":

Anonymous says:

I think you are 99% right in your analysis - but I think that smartbooks can replace Windows-based netbooks.

The reason: I believe that in the future you will get online with a relatively weak machine (such as a smartbook) but then access an extremely powerful server to do your work; this server could easily be a Windows machine with a custom environment for each user in a company -- complete with the Office suite and inherent access to the internal network.


I saw a demo of this -- logging into a server with 16 gigs of RAM to do basic computing. Even from a weak front-end terminal machine, applications !fly!

Anonymous says:

The problem with this theory is that mobile phone companies (especially in the US) have a tendency to lock down and cripple what you can do with your phone. I have trouble believing that they will leave their branded netbooks open enough to actually be useful.

The Mad Hatter says:

Part of the success of Netbooks is due to the fact that since they ran Windows some consumers have purchased them as the replacement for a full sized laptop.

Pardon Erlik, but you must have been asleep for a good bit of the last couple of years. Netbooks were a success long before Microsoft even noticed that the form factor existed.

Netbooks were a success in spite of Microsoft, not because. Before Microsoft noticed the Netbook market, viruses weren't a problem, Netbooks ran faster, Netbooks didn't have a registry, and so on and so on.

Microsoft's entry into the Netbook OS market was the worst thing to happen to Netbooks.

Just wait. I predict that within 18 months, Microsoft will panic, and start trying to sell Windows CE for ARM based Netbooks. I'm not sure if there's a MIPS version of Windows CE, if there is, they'll offer it for MIPS as well. Microsoft may be trying to make everyone think that ARM and MIPS based Netbooks aren't real computers. Well, consumers aren't stupid. They know a computer when they see one, and a computer with a 6 hour battery life that sells for less than $200.00 is a dream come true.

I also bet that we will see 10", 12", and 14" screens on ARM and MIPS powered Netbooks within the year, as the vendors producing them try to take market share from the big Notebook OEMS.

You just watch. Microsoft may think that they've made a smart move, but since Windows XP doesn't run on ARM or MIPS, they've just shot themselves in the foot, because unlike Dell, Acer, Lenovo, etc. most of the makers of the ARM and MIPS based devices aren't current Windows licensees, and Microsoft has no hold on them.

Anonymous says:

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